Considering The Possible Advantages of Health Savings Accounts (HSAs) for Clergy

Note: The below post relates to clergy in the Evangelical Lutheran Church of America (ELCA) and their benefits provider, Portico.  This said, the method detailed below could well apply to clergy across denominations and non denominations as an option for health insurance care. 

First thing: The vast majority of ELCA churches have only one employee (and likely their family) receiving healthcare through Portico.  The health medal election must be made annually by individual churches for all their Portico member employees.  Clergy, it would be wise to consider your options and influence this decision during the open time in which medal healthcare choices can be made by congregations (which is now and closes fairly soon - in a few weeks).  

The HSA option: Although Gold is often recommended, any one medal plan (Platinum, Gold, Silver or Bronze) doesn’t fit all.  If you are moderately physically and financially healthy, a Silver plan or Bronze plan with congregation HSA contribution can be a huge winner (the congregation contributes a monthly amount toward the HSA for this option).  These plans have higher deductibles, but the HSA (Health Savings Account) is powerful.  Health Savings Accounts are individual accounts that provide money, contributed tax free, for individual or family health expenses and can be put toward deductible expenses.  This in turn can reduce the actual out of pocket costs for patients if and when healthcare is used.  Additionally, money contributed to an HSA does not expire, DOES roll over year after year and can be invested via Portico's partner Further. 

Through good health, building up the value of an HSA account over the years can be a great health investment toward future health cost needs or even a supplement to retirement, if held onto into retirement. 

To consider an HSA plan you will need to consider either a Silver+ or Bronze+ plan WITH HSA option. If suitable, have your congregation elect for that medal plan for the coming year.  The cost to the congregation, by the way, for a Silver plan with HSA contribution by the congregation to your HSA account will usually be fairly close to the same cost as a Gold plan (that has no HSA option).

Utilizing the below chart (taken from the Portico Employer Website), let's look at an example of how a Silver with $2400 HSA Contribution might be a winner as compared to the standard Gold option for 2019.

To make the case for an HSA plan, consider this example:
Example Criteria: This comparison will consider the 2019 Gold+ plan vs. the 2019 Silver+ plan with HSA Congregation Contribution for a family of four living in North Carolina. In this family is one clergy and their spouse (both age 40) and 2 dependents.  All are insured through Portico.  To make the math easy, it will be assumed the defined compensation for the clergy person is $60,000/year. 

Gold Plan Example: The calculated cost to the congregation (using the Portico Calculator) for the Gold plan for this family will be: $22,500.  For the clergy family, the Gold plan family annual deductible is $2,600, after which they will pay 20% of the healthcare costs up to the out of pocket maximum of $8,200.

Silver Plan with $2400 Family HSA Congregational Contribution Example: The cost to the congregation (again using the Portico Calculator) for the Silver plan with $2,400 HSA Contribution for this family will be: $22,680. For the clergy family, the Silver plan family annual deductible is $5,000, after which they will pay 20% of the healthcare costs up to the out of pocket maximum of $8,200.  The $2400 contribution by the congregation will be placed into the clergy members HSA (an HSA started @ Portico via Further if no prior exists).  This HSA money is then available for paying toward deductibles for health care and can be invested also and banked year over year.  

Quick Analysis:

• ​The difference in cost to the congregation between these 2 scenarios is that the congregation would pay for the clergy family an additional only $180/year for the Silver + $2,400 HSA option over the most of the Gold plan.   (Math: Gold costs congregation $22500 and Silver with $2400 HSA costs congregation $22680)
• While this is a slight increase in cost to the congregation, the clergy member will be provided $2,400 in an HSA for the Silver option.  This money can be drawn from to pay for the first $2,400 in deductibles - and invested for growth until what portion is used - and banked year over year if not used and saved therefore for future healthcare costs.  
• Deductible Math: The resulting deductible, if family care were fully utilized is the same between Gold and Silver, as the $2600 family deductible is the same as the Silver's $5000 family deductible minus utilizing the $2400 HSA = $2600.  
• Further, with the same maximum out of pocket limits of $8200 per family, the Silver is the clear winner.  With Gold, when the max out of pocket limit is reached, the clergy member has paid out $8200 in costs for their family.  For Silver, when the max out of pocket limit is reached, the clergy has paid out $5800 in costs for their family, thanks to the first $2400 being paid by the HSA contribution.  
• Finally, in a scenario where the family were to be relatively healthy through the year, with the gold plan they would simply have not paid out much, if any, deductible costs.  With the Silver + $2400 HSA plan the same healthy family would bank most or all of their $2400 HSA dollars, which they can invest and save toward future year's health care needs (or eventually, into retirement, the HSA becomes almost like a traditional IRA as to how it can be accessed).  

If the HSA rolls over using the above example and costs were to stay the same in the years to follow, in as little as 4 years the entire out of pocket maximum for the Silver plan can be saved and available in the HSA account.  After this time, the HSA continues to grow in value and eventually, whatever is not used can be a supplement to retirement functioning similarly to a traditional IRA. In this created example, the silver plan is a huge winner!

Important: For 2019, A little research here could yield big heath care savings for pastors. It is worth the time to research this option closely, but this must be done quickly, as churches must make their health care medal elections very soon.  Please don't take the above as gospel as you consider your choices.  Make your own informed health care elections and do your due diligence into these options.  Do your own math! No one option fits all.   

Also of Note: The person in your congregation who interacts with Portico on behalf of your congregation will be in charge of picking your Medal option coming up for 2019.  It would be beneficial to speak to them before this decision is needed to be made (coming up sometime in the next few weeks) so that you could open the door to the Health Medal options you prefer.  

Finally, the 2 below pictures detail the Prescription Drug information for 2019 with Portico (Figure 1 - note that for those needing greater prescription care on a regular basis, this could factor into your Healthcare Medal choice as relates to the above info) and more detailed info about the HSA option (Figure 2).  There appears to be no difference as relates to Dental across the difference medal options.

HSA Info: